In a soft voice, William Rapfogel, the disgraced former CEO of the Jewish community’s well-connected anti-poverty agency here, pleaded guilty Wednesday to inflating the agency’s insurance bills in order to steal $9 million over 20 years for politicians, others and himself.
“I knowingly stole more than $1 million from the Metropolitan Council on Jewish Poverty,” Rapfogel, 59, told Manhattan Supreme Court Judge Larry Stephen.
Some of the skimmed money was used to make political contributions to influential elected officials, as well as to political organizations. Many of the donations were made in the names employees of Met Council’s insurance company, Century Coverage Corporation of Valley Stream, L.I.
The theft occurred between the time Rapfogel assumed the leadership of Met Council in 1992 and his dismissal last August.
As part of a plea agreement with New York State Attorney General Eric T. Schneiderman, Rapfogel has agreed to pay $3 million in restitution. Prosecutors said he has already paid $1.48 million and that if pays the full $3 million by his sentencing date of July 16, he will receive 3 1/3 to 10 years in prison. If not, he will be sentenced to serve from 4 to 12 years in prison.
Rapfogel’s predecessor at Met Council, David Cohen, also pleaded guilty Wednesday before Manhattan Supreme Court Judge Michael Obus to felony charges of grand larceny and conspiracy in connection with the same kickback scheme.
Cohen was executive director of Met Council from 1989 to 1992 and executive vice president from 1992 to 1995. He served thereafter as a paid consultant until the scandal surfaced in August after Met Council received an anonymous letter alleging wrongdoing with insurance payments. An outside law firm was called in to conduct an internal investigation, which led to Rapfogel’s firing and the start of a state probe by Schneiderman and State Comptroller Thomas DiNapoli.
Investigators from Schneiderman’s office went to Rapfogel’s homes here and in Monticello in August and reportedly found a total of $400,000 in cash hidden at both locations. At the time, Rapfogel’s salary was $400,000.
Authorities said Rapfogel regularly received envelopes stuffed with cash or checks made out for personal expenses. According to the criminal complaint, Rapfogel converted one of those checks to $100,000 in cash to help his son buy a house. And he is said to have paid $27,000 in cash to a contractor doing work on one of his homes.
Cohen’s lawyer, Alan M. Abramson, told The Jewish Week that under a plea deal worked out with his client, if Cohen “fully cooperates” with authorities he will be sentenced July 9 to a jail sentence of one year. Prosecutors said Cohen admitted illegally receiving approximately $650,000 in cash kickbacks and payments for personal expenses.
News of Rapfogel’s firing came as a shock when it was announced in August. He had been a political powerhouse in the city, a longtime friend of Assembly Speaker Sheldon Silver. Rapfogel’s wife, Judy, who still serves as Silver’s chief of staff, has said she knew nothing about the kickback scheme and has not been charged.
Joseph Ross, 58, the owner of Century Coverage. In December, Ross, the first defendant to admit guilt in the scheme, pleaded guilty to money laundering, tax fraud and conspiracy charges. He was charged with stealing at least $1 million.
In a statement, Schneiderman said Rapfogel and Cohen “abused positions of trust to steal millions of dollars from a taxpayer-funded charitable organization — one that is dedicated to serving New York City’s poor. Those who rip off taxpayers and charitable organizations will be prosecuted. While New York has the greatest nonprofit sector in the country, this case reminds us that we must vigilantly protect it. … I also thank the Met Council board of directors for bringing this activity to light and cooperating with our investigation.”
DiNapoli said in a statement that this was “a troubling and sad case of personal gain at the expense of important community services.”